Last Week's Recap
The US Market - Three major indexes notched their second-straight weekly loss
The three major indexes notched their second-straight weekly loss, with technology stocks under pressure as investors weighed upside surprises in inflation data and signs of moderating consumer spending.
February's consumer price index (CPI) rose 3.2% yoy , in line with consensus expectations, but core prices (less food and energy) rose a tick more than expected, by 3.8%. Because it was due in part to a continued increase in shelter costs, generally considered a lagging indicator of overall inflation trends.
Investors remain hyper vigilant and treasury yields soared, with the yield on the benchmark 10-year Treasury note touching its highest intraday level (4.32%) since February 27.
The US Sectors & Stocks - TSLA dropped 34% since 2024
Energy sector outperformed on the crude oil prices rose to four-month highs, while technology shares lagged due to weakness in chipmakers.
The Semiconductor ETF (SMH) notched its worst week since January, with ETF has dropped nearly 3% for the week. Marvell, AMD and TSMC led the fund down, with each tumbling more than 6% in the week.
Microsoft (MSFT) said Copilot for Security, a generative AI cybersecurity tool, will launch April 1. Shares hit a record high Thursday, then returned back.
Tesla (TSLA) stock crashed 34% year-to-date, becoming officially the worst-performing stock in the S&P 500. UBS analyst Joseph Spak lowered his price target to $165. Spak predicts Tesla will report only 432,000 deliveries for the quarter, 7% below his prior forecast and 10% below consensus estimates.
Oracle (ORCL) soared over 10% on bullish earnings. The database software giant said that demand for AI cloud infrastructure substantially exceeds supply.
Adobe (ADBE) dropped more than 10% as the software guided on weaker-than-expected FYQ2 sales, despite Adobe announced a new $25 billion share repurchase program.
Coinbase (COIN) has announced the pricing of an upsized offering of $1.1 billion in 0.25% convertible senior notes, set to mature in 2030.
3M (MMM) jumped over 11% on the week, registering its best week since 2002. The company has approved a spin off for its health care business, which will be known as Solventum. The company also announced that Bill Brown will succeed Michael Roman as CEO.
MicroStrategy (MSTR) announced the pricing of its offering of $525 million aggregate principal amount of 0.875% convertible senior notes due 2031 on March 15. The company just announced an offering of $800 million aggregate principal amount of 0.625% convertible senior notes due 2030 on March 8.
Hong Kong Market - HSTECH rose to bull market
Hong Kong stocks were lifted by share buy-backs to take advantage of current market valuations, sending the Hang Seng Index a 2.25% gain and thrusting the Hang Seng Tech Index into a bull market, defined as a rise of 20% from recent lows.
Reports this week showed some of the nation’s biggest builders, including China Vanke and Country Garden Holdings, struggled to repay their borrowings.
China's new home prices dropped for an eighth straight month in February, official data showed, suggesting the fragile property market is struggling to find a bottom despite a slew of measures to shore up the sector.
Drug maker Wuxi AppTec climbed 6 per cent to HK$51.95 after saying it spent 50 million yuan (US$7 billion) repurchasing its onshore shares trading in Shanghai on Monday. Affiliate Wuxi Biologics rallied 6.4 per cent to HK$18.84.
Singapore Market - STI slightly gained last week
Singapore stocks closed weekly higher, with the benchmark Straits Times Index (STI) gained 0.82% to close at 3172.96.
Singapore Airlines has priced US$500 million of 10-year, 5.25 per cent bonds at a re-offer price of 99.646 per cent of their nominal value to yield 5.296%.
Economists have upgraded Singapore's 2024 growth forecast to 2.4%, according to a survey by the country's central bank published on Wednesday, with better-than-expected external growth seen as the top upside driver for the economy.
Australian Market -ASX 200 was down 2.25%
Investors continued to bail out of bank stocks, dragging the Australian stock market lower despite some positive news for the big miners on the back of a stronger copper price.
The strong rally in bank share prices that saw most of them hit multi-year highs just a week ago is nothing but a memory now, with the financials sector shedding a hefty 1.8%, pushing the ASX 200 index down 2.25% to 7670.3 points.
The Week Ahead
Macro Factors - All eyes on Fed and BOJ
The Fed is set to release its latest monetary policy decision and updated economic projections at 2:00 p.m. ET on Wednesday afternoon, with investors looking for an answer to one key question: does the Fed still think it will cut rates three times in 2024?
FOMC is expected to keep rates unchanged at a range of 5.25% to 5.5%. Fed watchers will pay close attention to officials’ updated Summary of Economic Projections. Investors will pay more attention to is an update to the central bank’s dot plot, or the forward projections of individual committee members.
Notably, the March meeting could also bring the first indication that the Fed has begun discussions on tapering its quantitative tightening campaign, meaning the central bank will endeavor to phase out its effort to inject trillions of dollars into the economy.
The Bank of Japan is expected to end its negative interest rates when its policy board meets on Tuesday. The BOJ began coordinating both within and outside the bank on ending its negative interest rate policy, guiding short-term interest rates to the 0%-0.1% range.
Nvidia’s GTC
Nvidia will host its annual GTC conference on Monday, with investors keenly focused on the company's product roadmap as it rides a massive surge in demand for its chips amid the AI boom.
Nvidia’s GTC Conference, called “AI Woodstock” by Bank of America, where the AI chipmaker is anticipated to announce its next-generation B100 graphics processing unit that’s supposed to innovate on its flagship H100 chip.
The stock is up more than 77% since the year, though shares have been roughly flat over the last two weeks with investors in a holding pattern ahead of both this event and the Fed's meeting this week. Bank of America, which lifted its price target on the stock to $1,100 recently, said in a note: “Valuation, ownership levels still suggest room for upside.”
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